Watching Vipshop Yet? (3/14)

The article below from last week explains that Vipshop (VIPS) is an online discount retailer in China that went public two years ago. Since it first opened at $6 per share, this Sequoia funded company has gained over 2,400% to reach the current price of $152 per share.

ETF PM has long equity positions in Vipshop (VIPS).

Vipshop’s Rally Proving T.J. Maxx Business Model Right

Elena Popina, 3/10/14

The rally in Vipshop Holdings Ltd. (VIPS) is showing few signs of abating 19 months after it began.

The Chinese online fashion retailer jumped 27 percent last week to $166.55 in trading in New York, extending its gain to 2,462 percent since its initial public offering in March 2012. After slumping that July, the stock has rallied in all but two of the past 19 months as demand for its marked-down Anne Klein raincoats and Nike T-shirts soared. Only one stock, Intercept Pharmaceuticals Inc., has advanced more over that time among all U.S.-listed shares with a market value of at least $100 million.

Vipshop, which uses the same business model as T.J. Maxx and Ross Stores Inc. of selling excess inventory at cheaper prices, said March 3 that first-quarter sales will double to as much as $650 million, prompting analysts from Deutsche Bank AG and HSBC Holdings Plc to raise their share-price estimates. Vipshop’s share price has doubled this year after soaring 369 percent in 2013, the biggest advance on the Bloomberg China-US Equity Index. The gauge of the most-traded Chinese stocks in New York climbed 1.3 percent last week. The Shanghai Composite Index fell 2.9 percent today, while the Hang Seng China Enterprises Index (HSCEI) of mainland stocks traded in Hong Kong slid 1.8 percent.

“There is a lack of T.J. Maxx and Ross-type of stores in China, and Vipshop with its flash sales of brand apparel fills the gap,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $1.1 billion in assets, said March 7 in a phone interview from Lisle, Illinois. “People are surprised that the company keeps growing, exceeding analysts’ estimates, and that’s what is helping this spike in the share price.”

Click here for the full article.



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